The blue bulletin

Major Industries

Message from Luc Genier, Vice President

Sales and Market Development

(Video in French)

Regulatory and rates issues

rates case 2015

Following Gaz Métro’s tabling of its 2015 rates case, the Régie de l'énergie (the Régie) set the following rates:

The distribution rate was set provisionally on January 1, 2015, showing a reduction of 4.19%. A final decision is expected by summer 2015; should Gaz Métro’s proposal be accepted, this provisional rate would be increased by 0.7%

Effective January 1, 2015, the Transportation rate increased by 23.4%, due to the effect of the new TransCanada PipeLines Limited (TCPL) tariffs, approved by the National Energy Board (NEB). A further increase of 5.4% came into effect on February 1 due to a decision from the NEB related to TCPL’s abandonment costs.

The load balancing rate was set definitively on January 1, 2015, showing a reduction of 13.43%.

improving and strengthening networks

Gaz Métro recently tabled projects with the Régie aimed at improving and strengthening transmission networks in the Saguenay and the Eastern Townships, where the network’s saturation rate is high. Backed by four reports from experts, we are recommending upgrading the compressor station at Saint-Maurice and adding a compressor station on both the Saguenay and the Waterloo transmission
networks. These $129.3 M projects are aimed at ensuring security of supply for existing and future customers. A decision from the Régie is expected this summer.

review of interruptible service offer

The Régie
asked Gaz Métro to develop a plan for a new class of interruptible service,
aimed at Rate D4 customers, in order to meet to peak needs due to
exceptional events. Instead, Gaz Métro intends to review its whole interruptible
offer.
Several major industries will be consulted in spring 2015 by their
respective Advisors so that Gaz Métro can present an informed and reasoned
proposal to the Régie.

migration toward continuous service

The competitiveness of natural gas and the recent hard winters have encouraged a number of interruptible service customers to migrate toward continuous service during the term of their contract, which has led to additional transportation and load balancing costs. The Régie has asked Gaz Métro to study the possibility of revising the Conditions of Service and Tariff in order to minimize the impact of such migrations. We are evaluating this issue and we expect to propose a change to the conditions covering this type of migration in spring 2015.

national energy board cases

In order to protect the interests of its
customers and secure natural gas supplies to meet current and forecast demand, Gaz Métro is actively collaborating on TransCanada PipeLines Limited (TCPL) applications
to the NEB, particularly its Energy East and King’s North projects.

Understanding the interruption process

You have probably already wondered how Gaz Métro determines the need to announce interruption days for interruptible service customers. The decision stems from a rigorous process aimed at meeting the demands of Gaz Métro’s customers. First, a mathematical model is used to estimate demand, which is composed of base demand for the territory, plus additional demand based on the weather and days of the week. Meteorological data, received every hour from seven different areas in Québec, are then aggregated into a daily average for the whole Gaz Métro territory. Once total demand has been estimated, Gaz Métro plans the use of several provisioning tools to meet it.

It is important to mention that there is no precise temperature or rule of thumb to dictate whether there should or should not be an interruption. Depending on the duration of cold days and when the winter period starts and ends, storage provisioning tools might no longer be able to operate at their full capacity. This means that, even when the weather turns milder, it may be necessary to plan a day’s interruption, or to continue an interruption already in place.
If, even after the interruption, the demand for continuous service was not completely satisfied, GazMétro would then use the last tool available, that is, withdrawals from its Liquefaction, Storage and Regasification (LSR) plant, set up to ensure continuous distribution service.

The choice of customers subjected to a service interruption is based on the rate structures, as mentioned in the Conditions of Service and Tariff, and not according to the zone or region where a customer is located.

Remember that interruptible service customers benefit from lower load balancing and distribution rates than customers at the general rate of continuous service; in return, they may be subject to interruption on peak days.

Cap-and-trade system: purchase of emissions units from large emitter customers

In order to cover its needs under the Cap-and-trade system for greenhouse gas emission allowances while reinvesting the funds in Québec, Gaz Métro would like to buy emission units from customers who are large emitters and who would like to dispose of the emission units surplus to their needs that were acquired through earlier transactions or obtained free of charge from the Québec government. Gaz Métro will be conducting
a call for interest in mid-March in order to discuss offers that may, if appropriate, translate into short-term transactions. Further information will follow soon. In the meantime, your Advisor can direct you to the people responsible for the carbon market at Gaz Métro.

Our customers, big winners in the Énergia contest

The winners of the 25th edition of the Énergia contest of the Association québécoise pour la maîtrise de l’énergie (AQME) were named on February 4. The
contest recognizes excellent energy efficiency achievements in Québec. Gaz Métro is proud to count four major industry customers among the winners.